H1 2015 results - Valeo · 2019. 5. 14. · H2 sales and operatingmargin in line or better than H1...

H1 2015 Results

July 27, 2015 I 1

July 27, 2015

Jacques Aschenbroich – CEO

H1 highlights

Fueled by

innovation Order intake(1 ) of €10.7bn +18% as reported+13% like-for-like (2)

Sales of €7.3bn+15% as reported

+6% like-for-like (2)

OEM sales of €6.3bn+16% as reported


Growth* Outperformance**

July 27, 2015 I 2(1) See glossary page 40(2) Constant Group structure and exchange rates.

Outperformancein all production

regions and Business Groups

World OEM salesEurope

China

North America

Asia (excluding China)

South America

+7%+10%

+10%

+4%

+2%

-13%*OEM sales like-

for-like

+6pts+8pts

+5pts

+1pt

+3pts

+3pts**vs automotive production

Aftermarket sales of €0.8bn+8% as reported


H1 highlights

Strongimprovement in

Profitability

Operating margin* of €538m 7.4% of sales up 23%

Net income of €344m 4.7% of sales up 34%

EPS of €4.41 up 34%

EBITDA(1) of €913m 12.5% of sales up 24%

July 27, 2015 I 3

(1) See glossary page 40* incl. joint ventures and associates in accordance with new IFRS standards

Significant

cash generationincrease

EBITDA(1) of €913m 12.5% of sales up 24%

Free cash flow(1) of €306m Double H1 14

Cash conversion rate (FCF/EBITDA) 33%

ROCE(1) 32%

ROA(1) 21%

Net debt(1) of €219m down €122m vs end 2014

Chinese trend

Latest market trends

� Growth rate slowing down

� Many customers extending summer holidays

� Full-year growth production forecast: between 4% and 5%

� YTD organic growth of 10%

� Numerous starts of production ongoing thanks to very

July 27, 2015 I 4

Outperformance versus production in 2015

Valeo’sperformance

� Numerous starts of production ongoing thanks to very high historical level of order intake

� Strong growth with Chinese OEM

� Thanks to ongoing starts of production, H2 sales and operating margin in line or better than H1

� Adapt hiring and capex to current market conditions

� No change in long term view presented in London in March 2015

2015 outlook

Based on the following key assumptions for full-year 2015:

� Automotive production growth consistent with LMC estimates:� World: between 2% and 3%

� Europe (excl. Russia): between 4% and 5%

� China: between 4% and 5%

� Raw material prices and currencies in line with current levels

July 27, 2015 I 5

Valeo raises its full-year 2015 guidance :

� Sales growth outperformance in the main production regions including China

� Operating margin* (as a % of sales) higher than 2014 with a slight increase in operating margin* (as a % of sales) in the second half 2015 as compared to the first half

* Including joint ventures and associates in accordance with new IFRS standards

Strategic plan 2015-2020Valeo ahead of the plan Sales growth

[2015-2020] CAGR 8%

H1 15 order intakegrowth like-for-like +13%

Outperformance

[2015-2020] +5pts

H1 15 +6pts

Cashconversion rate

2020 >30%

H1 14 21%

H1 15 33%

Balanced, profitableorganic growth

July 27, 2015 I 6*See glossary page 40**FCF/EBITDA

Operating margin

2020 [8%-9%]

H1 14 +6.9%

H1 15 +7.4%

ROCE*

2020 >35%

H1 15 32%

GrowthProfit Cash

Half year order intake of €10.7bn

up 18% (up 13% like-for-like)

July 27, 2015 I 7

up 18% (up 13% like-for-like) confirming high growth potential

6.67.4 7.5

8.4

Order intake*€bn

Innovation fueling future organic growthas a % of order intake*

Acceleration in order intake up 18% (up 13% like-for-like)…… leading to an acceleration in Valeo’s future organic growth

(1) Products and technologies sold by less than 3 years

Innovation 30% (1)

July 27, 2015 I 8

4.3 4.3 4.8 4.73.0

6.37.4 7.7 7.3

9.110.72.8

4.64.6 4.9

5.8

5.6

6.6

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

H1 H22005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average over the period

*Excluding Access Mechanisms business from 2005 to 2013 and including joint ventures consolidated proportionally

FY order intake*€bn

€8.8bn

€15bn

€13bn

CAGR+12%

€17.5bn

Order

SA2%

Asia excl.

China

China16%

NA

% of H1 2015 OEM sales*

€1.4bn

22%

€0.8bn

SAAsia excl.China

China25%

NA

% of H1 2015 order intake*

€2.2bn

21%

€2.6bn

€0.4bn

Acceleration in order intake fueling future organic growthChina: local OEMs representing ~20% of OEM sales and 44% of order intake

Asia28%

Asia29%

July 27, 2015 I 9

OrderIntake/OE sales ratio

AsiaOf which China

1.7x2,6x

Europe 1.7x

North America 1.6x

Group 1.6x

16%

Europe

*OEM sales and order intake by destination including joint-ventures consolidated proportionally

OEM sales: €6.5bn

€3.1bn

48%

€1bn

Europe

Order intake: €10.7bn

€5.2bn

49%

Sales of €7.3bn, up 15% as reported up 6%

July 27, 2015 I 10

up 6% like-for-like

OEM sales, up 16% as reportedup 7% like-for like, a 6-point outperformance

Aftermarket sales, up 8% as reportedup 2% like-for-like

7,298

+15%+15%+15%

H1 sales totaled €7.3bn, up 15% as reported (up 6% like-for-like)Consistent performance over H1

Reported

July 27, 2015 I 11

3,581 3,717

7,298

Q1 15 Q2 15 H1 15

+6%

H1-2014 6,347

Exchange rates +8.5%

Scope +0.5%

+6%

Q1-2014 3,112


Scope +0.4%

+6%

Q2-2014 3,235


Scope +0.4%

€m

Like-for-like

OEM sales

6,316

Aftermarket

+2%**

400 413813

Q1 15 Q2 15 H1 15

+1%** +3%**

+16%*+16%* +16%*

+8%*+6%* +10%*

*Reported

€m

Consistent performance in OEM sales, up 16% as reportedImprovement in aftermarket sales (up 6% as reported in Q1, up 10% as reported in Q2)

+4%** excl.

July 27, 2015 I 12

3,113 3,203

Q1 15 Q2 15 H1 15

Miscellaneous

68 101169

Q1 15 Q2 15 H1 15

**Like-for-like +7%**

H1-2014 5,432


Scope +0.6%

+7%**Q1-2014 2,677


Scope +0.5%

+6%**

Q2-14 2,755


Scope +0.6%

+15%* -2%* +4%*

+10%** -5%** +1%**

€mSales from Korea

Europe*OEM sales** +10%

Production***-1%

Asia* excl. China

North AmericaOEM sales** +4%

Production*** +3% 49% of Valeo sales

23% of Valeo sales

Outperf.+1pt

Outperf.+11pts

Outperf.+3pts

WorldOEM sales** +6%

Production***0%

Outperf.+6ptsQ2

Like-for-like

OEM sales outpaced the market in all production regions

July 27, 2015 I 13

Asia* excl. ChinaOEM sales** +2%

Production***-1%

South AmericaOEM sales** -11%

Production***-18%

12% of Valeo sales

2% of Valeo sales

Outperf.+7pts

14% of Valeo sales

Outperf.+3pts

ChinaOEM sales** +6%

Production***+3%

* Europe including Africa; Asia including Middle East

** Valeo OEM sales by destination***LMC estimates – light vehicle production

JapanOEM sales* -6%

Production** -10%

17% of Asia salesKorea

OEM sales* +5%Production** +2%

22% of Asia sales

Outperf+3pts

Outperf+4pts

Q2Like-for-like

Outperf+3pts

AsiaOEM sales* +4%

Production** +1%

26% of Valeo sales

Above-market growth in all Asian countries

July 27, 2015 I 14

22% of Asia sales

IndiaOEM sales* +21%Production** +6%

3% of Asia sales

ChinaOEM sales* +6%Production** +3%

53% of Asia sales

Outperf+15pts

Outperf+3pts

*Valeo OEM sales by destination**LMC estimates – light vehicle production

Europe*OEM sales** +10%

Production***+2%

Asia* excl. China

North AmericaOEM sales** +4%

Production*** +3% 49% of Valeo sales

22% of Valeo sales

Outperf.+1pt

Outperf.+8pts

Outperf.+3pts

WorldOEM sales** +7%

Production***+1%

Outperf.+6pts

H1Like-for-like

OEM sales outpaced the market in all production regions

July 27, 2015 I 15

Asia* excl. ChinaOEM sales** +2%

Production***-1%

South AmericaOEM sales** -13%

Production***-16%

13% of Valeo sales

3% of Valeo sales

Outperf.+3pts*

* Europe including Africa; Asia including Middle East

** Valeo OEM sales by destination***LMC estimates – light vehicle production

13% of Valeo sales

Outperf.+5pts

ChinaOEM sales** +10%

Production***+5%

JapanOEM sales* -2%Production** -9%

18% of Asia salesKorea

OEM sales* +5%Production** -1%

22% of Asia sales

Outperf+6pts

Outperf+7pts

H1Like-for-like

Outperf+4pts

AsiaOEM sales* +6%

Production** +2%

26% of Valeo sales

Above-market growth in all Asian countries

July 27, 2015 I 16

22% of Asia sales

IndiaOEM sales* +14%Production** +6%

3% of Asia sales

ChinaOEM sales* +10%Production** +5%

52% of Asia sales

Outperf+8pts

Outperf+5pts

*Valeo OEM sales by destination**LMC estimates – light vehicle production

OEM sales by production region

Eastern Europe &

Africa15%

Western

Eastern Europe &

Africa15%

Western

Ongoing geographic rebalancing…

July 27, 2015 I 17

H1 2015H1 2014

US10%Mexico

10%

SA3%

Asia24%

52% in Asia& emergingcountries

Europe38%

US11%

Mexico11%

SA2%

Asia26%

WesternEurope

35%54% in Asia& emergingcountries

French* 16%

Other6%

… And a balanced, diverse customer portfolio

French*17%

Other 5%

% of OEM sales

German30%

German30%

July 27, 2015 I 18

Asian**26%

American23%

H1 2015

Asian** 29%

American 22%

H1 2014

* Excluding Nissan** Including Nissan

Asian**26%

Asian**25%

Total sales growth(year-on-year)

OEM sales growth(like-for-like)

H1 Q1 Q2 H1

CDA 18%

PTS26%

THS28%

VIS28%

Group€7.3bn

% H1 2015 sales

Above-market growth in all Business Groups

July 27, 2015 I 19

H1 Q1 Q2 H1

+19% +13% +13%

+14% +4% +7%

+13% +4% +1%

+16% +9% +7%Visibility

Thermal

+13%

+2%

CDA

Powertrain +5%

+8%

Net income, up 34%

July 27, 2015 I 20

Operating margin*, up 23% to €538m or 7.4% of sales

to €344m or 4.7% of sales

* incl. joint ventures and associates in accordance with new IFRS standards

+40bps +30bps

+10bps

-10bps

-20bps-10bps

Gross margin up 19% to €1,280m or 17.5% of sales Improvement driven by volumes and operational efficiency

+19%€1,280m

€1,080m€1,086m

July 27, 2015 I 21

17.1% 17.0%17,5%

H1-14published

IFRIC 21 (change in accounting

rules)

H1-14restated

Volume/ inflation

Operationalefficiency

Depreciationlinked

to growth

South America Perimeter H1-15

NB: rounded figures

+50bps +0bps+20bps

-10bps

-20bps

Operating margin* up 23% to €538m or 7.4% of sales

€436m

€538m+23%

€442m

July 27, 2015 I 22

7.0% 6.9%7.4%

H1-14published

IFRIC 21 (change in accounting

rules)

H1-14restated

Grossmargin

Net R&D SG&A Non-recurring(Valeo-

Sylvania 2014)

H1-15

* incl. JV & Associates in accordance with new IFRS standards

NB: rounded figures

350

402

+15%

Net R&DIn €m & as a % of sales

Net R&D expenditure stable at 5.5% of salesStrong R&D effort to sustain high order intake

Capitalized developmentexpenditureIn €m & as a % of sales

150 148173

H1 14 H2 14 H1 15

2.4% 2.3% 2.4%

July 27, 2015 I 23

H1 14 H1 15

5.5% 5.5%

stable

89 86104

H1 14 H2 14 H1 15

Amortization of capitalized development expenditureIn €m & as a % of sales

1.4% 1.3% 1.4%

G&A expenses down 10 basis points

326363

In €m & as a % of sales

Sellingexpenses

103or 1.6%

Sellingexpenses

115or 1.6%

stable

July 27, 2015 I 24

H1 14 H1 15

Admin.expenses

223or 3.5%

Admin.expenses

248or 3.4%

-10bps

H1 14* H1 15 Change

Total sales (€m) 6,347 7,298 +15%

Operating margin excl. JV & Associates (€m)As a % of sales

4046.4%

5157.1%

+28%+70bp

JV & Associates (€m)As a % of sales

320.5%

230.3%

-28%-20bp

Operating margin incl JV & Associates (€m)As a % of sales

4366.9%

5387.4%

+23%+50bp

Other income & expenses (€m)As a % of sales

(34)-0.5%

(21)-0.3%

n/a+20bp

Operating income (€m)As a % of sales

4026.3%

5177.1%

+29%+80bp

Net income up 34% to €344m or 4.7% of sales

July 27, 2015 I 25

As a % of sales 6.3% 7.1% +80bp

Cost of net debt (€m)Other financial expenses (€m)

(47)(20)

(43)(26)

-9%+30%

Income before taxes (€m) 335 448 +34%

Taxes (€m)Effective tax rateNon strategic activities (€m)Non-controlling interests and other (€m)

(65)21.5%

0(14)

(80)18.8%

0(24)

+23%-2.7pts

n/an/a

Net income (€m)As a % of sales

2564.0%

3444.7%

+34%+70bp

Net income excl. non-recurring items (€m)As a % of sales

2724.3%

3574.9%

+31%+60bp

*Restated in accordance with IFRIC 21

H1 14* H1 15 Change

Net income (€m) 256 344 +34%

EPS €3.29 €4.41 +34%

Net income 272 357 +31%

Net income up 34%

July 27, 2015 I 26

Net income (€m) (excluding non-recurring items) 272 357 +31%

EPS (excluding non-recurring items) €3.50 €4.58 +31%

*Restated in accordance with IFRIC 21

ROCE at 32%

H1 14* H1 15

Total sales €6.3bn €7.3bn

Operating margin** 6.9% 7.4%

ROCE 32% 32%

July 27, 2015 I 27

ROCE 32% 32%

ROA 20% 21%

*Restated in accordance with IFRIC 21** incl. JV & Associates in accordance with new IFRS standards

Free cash flow of €306m,

July 27, 2015 I 28

double H1 2014

11.2%

11.6% 11.6%

12.4%12.5%

In €m & as a % of sales

H1 14** H1 15

Comfort & DrivingAssistance

As a % of sales 14.1% 14.4%

PowertrainAs a % of sales 12.2% 12.1%

ThermalAs a % of sales 11.0% 11.1%

VisibilityAs a % of sales 9.3% 11.8%

TOTAL 11.6% 12.5%

EBITDA margin up 90bps or 24%, to 12.5% of sales

July 27, 2015 I 29

666 661

734792

913

H1 13* H2 13* H1 14** H2 14** H1 157%

9%

11%

13%

15%

H1 13* H2 13* H1 14** H2 14** H1 15

Comfort and Driving Assistance Systems Powertrain Systems

Thermal Systems Visibility Systems

Group

* In accordance with IFRS 11**Restated in accordance with IFRIC21

2.4% 2.4%

4.6% 5.0%

H1 14 H1 15

362

444

535

Capex*

(as a % of sales)

+21%

In €m

Investments of €535mSupporting the fast-growing order intake

Capex*

Capital.R&D

Development of footprint

7.0% 7.4%

July 27, 2015 I 30

150 173

294362

H1 14 H1 15

Capex*

Capitalized R&D

* excluding capitalized R&D

Development of footprintTotal sq.m. end 2014: 2.4m

• Completed in H1:3 new sites

6 extensions+60,500 sq.m.

• In progress: 5 new sites

8 extensions+64,800 sq.m.

H1 14* H1 15

EBITDA (€m) 734 913

Operating working capital (€m) (29) 48

Restructuring & employee-related costs (€m) (17) (11)

Other operating items (incl. taxes) (€m)Of which:TaxesPensions

(84)

(74)(12)

(105)

(81)(16)

Cash from operating activities** (€m) 604 845

Free cash flow of €306m, double H1 2014

+24%

July 27, 2015 I 31

Cash from operating activities** (€m)

Capex (incl. capitalized R&D) (€m)*** (451) (539)

Free cash flow** (€m)(before interest payments)

153 306

Interest (€m) (64) (56)

Other financial items (€m) (381) (141)

Net cash flow(1) (€m) (292) 109

Net debt (€m) 525 219

Of which:- Dividend paidto shareholders (172)

*Restated in accordance with IFRIC 21**excluding sale of trade receivables***cash outflow(1) See glossary page 40

Double H1 2014

July 27, 2015 I 32

Strong balance sheet

1,4011,526

1,705

Stockholders’ equity (€m)excluding non-controlling interests

Net debt (€m)

Net debt (€m) EBITDA 12 months rolling (€m)

Leverage: net debt/EBITDA

525341 219

2,4132,740

3,151

Gearing: net debt/stockholders’ equity

Leverage & gearing ratios at 0.1x and 7% respectivelyMoody’s LT rating upgraded to Baa2 stable outlook (May 12, 2015)

July 27, 2015 I 33

525341

219

June 30, 2014 Dec 31, 2014 June 30, 2015

Gearing

22%

Gearing

12%

Leverage

0.4x

Leverage

0.2x

Gearing

7%

Leverage

0.1x

June 30, 2014 Dec 31, 2014 June 30, 2015

LT Outlook ST

Moody’s Baa2 Stable Prime-2

S&P BBB Stable A-2

1500

2000

2500

3000

Debt maturity profile

Undrawncredit lines4.5-yearmaturity

Average maturity: 4.6 yearsAverage maturity: 4.6 years

July 27, 2015 I 34

0

500

1000

2015 2016 2017 2018 … … 2024

BEI Financing EMTN Syndicated Loan Cash & equivalents Private Placements Undrawn Credits Lines

Cash & cash

equivalents

Average maturity: 4.6 yearsAverage maturity: 4.6 years

2015 outlook

July 27, 2015 I 35

2015 outlook

2015 outlook

Based on the following key assumptions for full-year 2015:

� Automotive production growth consistent with LMC estimates:� World: between 2% and 3%

� Europe (excl. Russia): between 4% and 5%

� China: between 4% and 5%

� Raw material prices and currencies in line with current levels

July 27, 2015 I 36

Valeo raises its full-year 2015 guidance :

� Sales growth outperformance in the main production regions including China

� Operating margin* (as a % of sales) higher than 2014 with a slight increase in operating margin* (as a % of sales) in the second half 2015 as compared to the first half

* Including joint ventures and associates in accordance with new IFRS standards

Contact

Investor Relations

Thierry Lacorre

43, rue BayenF-75848 Paris Cedex 17France

July 27, 2015 I 37

Tel.: +33 (0) 1.40.55.37.93Fax: +33 (0) 1.40.55.20.40

E-mail: [email protected]: www.valeo.com

Share Information

FR FPVLOF.PAFR 00013033879,462,540

Share Data

� Bloomberg Ticker� Reuters Ticker� ISIN Number� Shares outstanding as of June 30, 2015

July 27, 2015 I 38

ADR Data

� Ticker/trading symbol� CUSIP Number� Exchange� Ratio (ADR: ord)� Depositary Bank� Contact at J.P. Morgan – ADR

broker relationship desk

VLEEY919134304OTC1:2J.P. MorganJim Reeves+1 212-622-2710

Glossary

1) Order intake corresponds to business awarded by automakers during the period (including joint ventures at least 50%-owned by the Group) less any cancellations, based on Valeo’s best reasonable estimates in terms of volumes, selling prices and project lifespans. based on Valeo's best reasonable estimates in terms of volumes, selling prices and project lifespans. Unaudited indicator.

2) Operating margin including share in net earnings of equity-accounted companies corresponds to operating income before other income and expenses.

3) Net attributable income excluding non-recurring i tems corresponds to net attributable income adjusted for "other income and expenses" net of tax and non-recurring income and expenses net of tax shown in operating margin including share in net earnings of equity-accounted companies.

4) ROCE, or return on capital employed, corresponds to operating margin (including share in net earnings of equity-accounted companies) in relation to capital employed (including investments in equity-accounted companies) excluding goodwill.

5) ROA, or return on assets, corresponds to operating income in relation to capital employed (including investments in equity-

July 27, 2015 I 39

5) ROA, or return on assets, corresponds to operating income in relation to capital employed (including investments in equity-accounted companies) including goodwill.

6) EBITDA corresponds to (i) operating margin before depreciation, amortization and impairment losses (included in the operating margin), and (ii) net dividends received from equity accounted companies.

7) Free cash flow corresponds to net cash from operating activities (excluding changes in the sale of non-recurring trade receivables) after taking into account acquisitions and disposals of property, plant and equipment and intangible assets.

8) Net cash flow corresponds to free cash flow less (i) cash flows in respect of investing activities, relating to acquisitions and disposals of investments and to changes in certain items shown in non-current financial assets, (ii) cash flows in respect of financing activities, relating to dividends paid, treasury share purchases and sales, interest paid and received, and acquisitions of equity interests without a change in control, and (iii) changes in sales of non-recurring trade receivables.

9) Net debt comprises all long-term debt, short-term debt and bank overdrafts, less loans and other non-current financial assets, cash and cash equivalents.

Back-up

July 27, 2015 I 40

Back-up

Comfort & Driving Assistance Systems 2014 key figures:• Sales: €2.3bn (18% of Group sales)• EBITDA: 14.5% (22% of Group EBITDA)

• 14,195 employees• 25 production units• 8 development centers• 9 research centers

Market share* and competitors:

- Driving Assistance: Valeo no.1Valeo + Bosch + Continental ~ 50%*

- Interior Controls: Valeo no.1Valeo + Kostal + Tokai Rika > 25%*

Sales performance

Total sales (€m)

Total sales -change asreported

OEM sales Like-for-likechange

+13% +13%

+19%

657 679

1,336

Q1 15 Q2 15 H1 15

+19%

+13%

+19%

July 27, 2015 I 41

Key growth drivers:� Development of solutions for connected and autonomous vehicles (Valeo first automotive supplier to present a

product comparable to the Valet Park4U® driving assistance system)

� Change in regulations: mandatory rear camera in the U.S. as from May 2016 (100% applicable in 2018)

Latest business developments:� 360Vue 3D "bowl view" launched end of 2014

� Exclusive technology cooperation agreement (fusion of sensors, front camera with Laser Scanner) with Mobileyein March 2015

� New Renault Espace center stack display

� First Telematic Control Unit to be launched in 2015 and 3 other projects awarded

Valeo + Kostal + Tokai Rika > 25%*

* Valeo estimate

change

Powertrain Systems 2014 key figures:• Sales: €3.3bn (26% of Group sales)• EBITDA: 12.3% (27% of Group EBITDA)



- Transmission Systems: Valeo no.2Luk + Valeo + ZF Sachs = 45%*

- Electrical Systems: Valeo no.1Valeo + Denso + Bosch > 70%*

Sales performance

+4%

+12%

Total sales (€m)

OEM sales Like-for- likechange

+7%

+15%Total sales -change asreported

948 978

1,926

Q1 15 Q2 15 H1 15

+5%

+14%

July 27, 2015 I 42

Key growth drivers:Objective of reducing CO2 emissions and fossil fuel consumption based on 3 priorities for engines:

� Downsizing /Downspeeding

� Automatic gearbox

� Electrification

Latest business developments:� Pace award for the Efficient alternator

� Dual clutch: two launches in Asia

� Several order intakes in 48 volt in Europe and Asia

� Electric supercharger start of production in Q1 2016

� Power electronics: start of production of a charger on Volvo XC90 and of an inverter on Renault Zoe.

*Valeo estimate

Thermal Systems2014 key figures:

• Sales: €3.6bn (28% of Group sales)• EBITDA: 11.1% (26% of Group EBITDA)



- Thermal Systems: Valeo no.2Denso + Valeo + Halla (Visteon) = 50%*

Sales performance

+4%

+14%

Total sales (€m)

OEM sales Like-for-like +1%


1,007 1,039

2,046

Q1 15 Q2 15 H1 15

+2%

+13%

July 27, 2015 I 43

Key growth drivers:

� Innovative solutions to comply with new regulations on gas pollutants and fuel consumption

� Thermal solutions for Electrified vehicles (PHEV/EV)

Latest business developments:

� Exhaust Heat Recovery System: first order for an Asian carmaker

� Engine cooling module: big orders with new generation of high performing radiator

� Battery thermal management: start of production of chiller new generation and several orders for German & Chinese carmakers

� Water condenser: new order for German carmakers on major platforms

*Valeo estimate

+4%Like-for-likechange

+1% +2%

Visibility Systems2014 key figures:

• Sales: €3.6bn (28% of Group sales)• EBITDA: 10.6% (25% of Group EBITDA)



- Lighting Systems: Valeo no.2Koito + Valeo + Magnetti Marelli > 55%*

- Wiper Systems: Valeo no.1Valeo + Bosch + Denso > 75%*

Sales performance

Total sales (€m)

OEM sales Like-for- likechange

+7%


1,022 1,072

2,094

Q1 15 Q2 15 H1 15

+9%

+17%

+8%

+16%

July 27, 2015 I 44

Key growth drivers:

� Automakers’ widespread implementation of lighting systems with LED low beam, high beam or daytime running lights

� Growing interest in electronic wiper systems and Aquablade® wiper technology

Latest business developments:

� 3 BeamAtic PremiumLED (Glare-free high beam) at 3 different customers

� First FullLED headlamp equipping a pure Chinese car

� First BeamAtic PremiumLED (Glare-free high beam) made-in-China

� Valeo AquaBlade® technology, as well as electronized motors have been chosen for the Mercedes GLE and Tesla X.

Valeo + Bosch + Denso > 75%*

*Valeo estimate

change

Quarterly informationIn €m (2014 restated in accordance with IFRIC 21)

� Sales by segment

Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15

Comfort & DrivingAssistance Systems 623 569 515 531 552 572 573 614 657 679

PowertrainSystems 774 817 752 818 848 848 798 843 948 978

Thermal Systems 818 885 832 837 880 934 889 934 1,007 1,039

Visibility Systems 733 762 711 764 876 925 856 957 1,022 1,072

July 27, 2015 I 45

Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15

Original Equipment 2,470 2,567 2,348 2,449 2,677 2,755 2,6 44 2,814 3,113 3,203

Aftermarket 375 374 361 377 376 377 366 376 400 413

Miscellaneous 82 76 83 100 59 103 59 119 68 101

Total sales 2,927 3,017 2,792 2,926 3,112 3,235 3,069 3,309 3,581 3,717

� Sales by type

Total sales 2,927 3,017 2,792 2,926 3,112 3,235 3,069 3,309 3,581 3,717

2013 2014* 2015

In €m H1 H2 H1 H2 H1

� Sales 5,944 5,718 6,347 6,378 7,298

� Gross margin 1,011 998 1,086 1,123 1,280

as a % of sales 17,0% 17.5% 17.1% 17.6% 17.5%

R&D expenditure, net (318) (296) (350) (335) (402)

Selling & administrative expenses (318) (311) (326) (330) (363)

Share in net earnings of equity-accounted companies 8 18 32 19 23

� Operating margin incl. share in net earnings of equity-accounted companies 383 409 436 477 538

as a % of sales 6.4% 7.2% 6.9% 7.5% 7.4%

Statement of income with half year breakdown

July 27, 2015 I 46

as a % of sales 6.4% 7.2% 6.9% 7.5% 7.4%

Other income & expenses (41) (26) (34) (20) (21)

� Operating income 342 383 402 457 517

as a % of sales 5.8% 6.7% 6.3% 7.1% 7.1%

Cost of net debt (49) (49) (47) (44) (43)

Other financial income and expenses (21) (25) (20) (26) (26)

� Income before income taxes 272 309 335 387 448

Income taxes (68) (45) (65) (64) (80)

� Income from continuing operations 204 264 270 323 368

Non-strategic activities 0 0 0 0 0

� Net income for the period 204 264 270 323 368

Non-controlling interests (14) (15) (14) (17) (24)

� Net income 190 249 256 306 344

* 2014 restated in accordance with IFRIC 21

(€m)

Comfort & Driving

Assistance Systems

PowertrainSystems

Thermal Systems

VisibilitySystems Others Total

Sales:

● segment (excluding Group) 1,327 1,898 2,022 2,035 16 7,298● intersegment (Group) 9 28 24 59 (120) -

EBITDA 192 231 227 247 16 913Research & Development expenditure, net (125) (90) (72) (111) (4) (402)Investments in property, plant & equipment & intangibleasset 149 131 109 133 12 534Segment assets 1,347 1,772 1,415 1,774 70 6,378

Segment information

H1 2015

July 27, 2015 I 47

H1 2014

(€m)

Comfort & Driving

Assistance Systems

PowertrainSystems

Thermal Systems

VisibilitySystems Others Total

Sales:

● segment (excluding Group) 1,115 1,673 1,793 1,751 15 6,347● intersegment (Group) 9 23 21 50 (103) -

EBITDA 159 207 199 167 2 734Research & Development expenditure, net (99) (82) (82) (84) (3) (350)Investments in property, plant & equipment & intangibleasset 111 111 83 129 10 444Segment assets 1,162 1,604 1,223 1,558 49 5,596

Safe Harbor Statement

Statements contained in this press release, which are not historical fact, constitute "Forward-Looking Statements". Even though Valeo’s management feels that the Forward-Looking Statements are reasonable, investors are put on notice that actual results may differ materially due to numerous important factors, risks and uncertainties to which Valeo is exposed. Such factors include, among others, the Company’s ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions. The risks and uncertainties to which Valeo is exposed mainly comprise the risks resulting from the investigations currently being carried out by the anti-trust authorities as identified in the Registration Document and risks relating to legal action resulting from such investigations, risks which relate to being a supplier in the automotive industry and to the development of

July 27, 2015 I 48

new products and risks due to certain global and regional economic conditions. Also included are environmental and industrial risks as well as risks and uncertainties described or identified in the public documents submitted by Valeo to the French financial markets authority (Autorité des marchés financiers –AMF), including those set out in the “Risk Factors” section of Valeo’s Registration Document registered at the AMF on March 27, 2015 (under no. D.15-0220).

The company assumes no responsibility for any estimates made by analysts and any other information prepared by third parties which may be used in this press release. Valeo does not intend or assume any obligation to review or to confirm the estimates of analysts or to update any Forward-Looking Statements to reflect events or circumstances which occur after the date of this press release

July 27, 2015 I 49

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